Investing in shares could be a wild trip at instances. Those that invested in FTSE 100 shares simply earlier than the 2008 monetary disaster or Covid-19, as an example, would have been left holding their heads of their palms shortly afterwards!

However over the long run, a diversified portfolio of shares could be a vital wealth builder. Historical past reveals us that inventory markets have at all times rebounded strongly following financial crises, and that those that ‘bought a ticket’ may reap substantial returns.

Through the previous 40 years, the Footsie has delivered a mean annual return of 8%. It implies that somebody who invested £300 a month over that interval may have made a formidable £1,047,302.

Right here’s one FTSE 100 share I consider may generate spectacular generational returns.

Leases big

Right now, Ashtead Group (LSE:AHT) is a powerhouse within the world rental tools market. Simply earlier than the 2008 monetary disaster, it had a 4% share of its precedence US market, the place it traded from 398 shops.

Proper now its market share is greater than treble that, at 14%. It’s now the nation’s second-largest operator with 1,186 rental shops.

Enterprise and people in ever-greater numbers are selecting to hire their heavy tools as an alternative of shopping for. The benefits are apparent: decrease upfront prices, no storage points, and higher cross-project flexibility.

Via heavy natural funding and a gradual stream acquisitions, Ashtead has capitalised on this alteration to nice impact. It made $10.9bn in revenues within the final monetary yr, up from round $1.3bn earlier than the monetary disaster.

Pre-tax earnings have additionally ballooned, from roughly $139m to $2.2bn, over the interval.

Robust performer

This success story has seen Ashtead ship gorgeous capital positive factors and spectacular dividend development in that point. Actually, it is likely one of the FTSE 100’s true dividend aristocrats, having grown annual payouts annually for round 20 years.

Because of this, the corporate has delivered the most effective returns of any present Footsie share over the previous 20 years. It’s delivered a return north of 35,000% in that point.

The previous is not any assure of the long run, in fact. And Ashtead may face vital obstacles going forwards, like risky circumstances in its North American and European markets, in addition to rising prices.

Vivid outlook

Nonetheless, I count on the corporate to proceed delivering sturdy generational returns to its traders. For this reason it’s now the biggest holding in my very own shares portfolio.

Analysts at Grand View Analysis suppose the US building rental tools sector will increase at a compound annual development fee of 6.1% between now and 2030. Development can be pushed by the nation’s sturdy building market and a gradual stream of main infrastructure initiatives.

Encouragingly, Ashtead stays dedicated to increasing to use this chance, too. It made 26 bolt-on acquisitions final yr alone. A robust steadiness sheet, with a net-debt-to-EBITDA ratio of 1.7 instances, provides it room for additional investments.

Like every share, Ashtead comes with danger. However I believe its sturdy observe report and vivid market outlook makes it a superb FTSE inventory to contemplate at this time.